Extendicare Inc. (TSX:EXE) entered into an agreement to acquire a 15 percent stake in a Portfolio of 24 Long Term Care Homes from Revera Inc. on March 1, 2022. Extendicare will acquire a 15% managed interest in 18 “class A” long-term care homes located in Ontario and six homes in Manitoba. The remaining 85% interest will continue to be owned by an affiliate of Axium.

Relatedly, on closing of the Acquisition, Extendicare will enter into management contracts with Revera to manage all of Revera's other long-term care homes, which comprise 31 “class C” homes located in Ontario and one personal care home located in Manitoba. Extendicare will also enter into development arrangement agreements with Revera in respect of the potential redevelopment of those managed “class C” homes in Ontario into new homes. The aggregate cash consideration for the Transactions is approximately CAD 36.0 million plus the assumption of approximately CAD 34.0 million in debt, subject to customary adjustments.

Certain of the associated debt will be refinanced or repaid on or before closing, resulting in changes in the allocation between cash consideration and debt assumption. The purchase price is expected to be funded from cash on hand. Closing of the Axium Transaction is subject to customary closing conditions, including receipt of regulatory approvals from the Ontario Ministry of Long-Term Care, and is not conditional on financing or due diligence.

BMO Capital Markets is acting as financial advisor to Extendicare and  Simon Knowling, Graham Rawlinson, Susan Nickerson, Craig Maurice and Nina Mansoori of Torys LLP is acting as legal advisor to Extendicare in connection with the Transactions. Stikeman Elliott LLP is acting as legal advisor to Axium in connection with the Transactions. Stormont Partners Advisory is acting as financial advisor to Revera and Goodmans LLP is acting as legal advisor to Revera in connection with the Revera Transactions.